TSLA Market Action: 2018 Investor Roundtable

[Do It]

i don't know how to make it sticky...if you know how to do it please let me know.



Thanks and corrected!

MOD: Not only will it not be made sticky, but this kind of activity, while neither prohibited nor otherwise squelched, is directly contrary to sobersided admonitions from the Moderator Bench in terms of how forum members ought demonstrate their holdlings in TSLA.
Moreover, the exclusion from participating of just an extremely small number of active members who hold very significant positions immediately renders utterly useless this exercise - so what, really, would this accomplish?

People might find the information useful in many ways, but my main motivation is to show that readers of this forum hold significant amount of tsla investment (probably in billions,) and we collectively have a meaningful impact on the market. I hope realizing this would make people write higher quality posts, and be more careful when posting things that might be taken advantage of by the shorts (such as spreading baseless fear during down market.)

As for the possibility of exclusion of some participants, I hope everyone participates so we have a good picture - i just don't see a good reason not to participate on purpose.

 

[cheshire cat]

Well, it wouldn' t need name rank and number, would it? "Don't tell him Pike"

 

[avoigt]

Time to talk about the German media again:

I posted in the last month all the FUD they did spread and complaint about the reporting as such. Today I am happy to reveal that we see in the last two weeks a remarkable and not seen before strong majority of positive reports.

Fünf Gründe, warum Tesla an der Börse glänzt
Teslas erstaunliches Wachstum in 3 Grafiken
Warum Tesla der Baisse an der Nasdaq trotzt | Kurse | boerse.ARD.de
Teslas erstaunliches Wachstum in 3 Grafiken

We should expect that negative reporting will peak up again if news come out that can be interpreted like that but this is fair and I call it balanced as soon as they also report on the positives.

I hope that from now on the media moves more to a normal and balanced reporting about Tesla. Outliners will always exist but thats again nothing that we do not see with other companies.

 

[avoigt]

I talked yesterday with a sales manger in the Munich Tesla store and he told me they did not have time to breath the whole week trough given the constant and never ending cloud of people around the 3 from when the opened the store in the morning up to the evening where they have to lock the store to avoid it never gets empty.

The car is now about 10 days in the store and was occupied every second I was around.

I did not pick up a single negative tone, glance or comment from any visitor instead only positives so as expected the car continues to impress just standing and I can just imagine how it will be once they drive it.

 

[Priigoat]

I just played a little bit with the financial model of Tesla. In my opinion, the following data could be quite accurate regarding revenue growth and operating profit based on the following underlying 'realistic' and not 'optimistic' assumptions:

1.) Short-term until 2020/2021, I expect highter than average-industry revenue growth rates in terms of units sold. This is due to the fact that Tesla is still ramping up production and demand is not yet satisfied.

2.) In 2020, I expect Model 3 demand to first see a first set-back and the growth rate will slowly adjust itsself to the normal electric vehicle industry rate. Furthermore, we are unsure about how Tesla will be able to producre more than 400k Model 3 per year.

3.) I expect revenue per car to drop significantly next year due to the fact that prices of both Model X and Model S will decline and more Model 3 will be sold at a cheaper price at a constant gross margin.

4.) As mentioned above, I expect gross margin to remain constant over the next 3 years as production gets more efficient but prices need to decline to meet additional demand from normal people and not Tesla fangroups.

5.) I expect R&D to remain high due to the upcoming new models and therefore eating up a lot of operating profit.

6.) I expect Tesla to have 2-3 more capital raises in the next 4 years, as you can see in the model.

Conclusion: From a revenue perspective, I can totally see Tesla hitting 750-1000$ per share as demand for electric vehlices will gradually raise over the next 15 years. However, I do also expect due to the following 2 reasons, that gross profit will decline and not a lot of operating profit will be left for shareholders (letting the short theory to be at least partly alive):

- Competition will enter the market putting pressure on gross margins long-term. Normal automotive gross margins are around 13%. As Tesla is a luxury brand, one might argue about a gross margin in the 15-20% range. I do not think that over 20% is long-term sustainable as more competition enters the market.

- Furthermore, Tesla will need to invest a lot of money in Research in Development and I expect to see a lot of value from these expenses but also nut a lot of profitability from a shareholder perspective.

 

[22522]

I talked yesterday with a sales manger in the Munich Tesla store and he told me they did not have time to breath the whole week trough given the constant and never ending cloud of people around the 3 from when the opened the store in the morning up to the evening where they have to lock the store to avoid it never gets empty.

The car is now about 10 days in the store and was occupied every second I was around.

I did not pick up a single negative tone, glance or comment from any visitor instead only positives so as expected the car continues to impress just standing and I can just imagine how it will be once they drive it.

My efforts to improve awareness include showing off midrange acceleration on uphill on ramps. Clearing for trucks and such. If they still used CB radios, every trucker would be a tesla fan - never cause anyone to use their brakes. Very considerate and noticeable display of power.

 

[mongo]

I just played a little bit with the financial model of Tesla. In my opinion, the following data could be quite accurate regarding revenue growth and operating profit based on the following underlying 'realistic' and not 'optimistic' assumptions:

1.) Short-term until 2020/2021, I expect highter than average-industry revenue growth rates in terms of units sold. This is due to the fact that Tesla is still ramping up production and demand is not yet satisfied.

2.) In 2020, I expect Model 3 demand to first see a first set-back and the growth rate will slowly adjust itsself to the normal electric vehicle industry rate. Furthermore, we are unsure about how Tesla will be able to producre more than 400k Model 3 per year.

3.) I expect revenue per car to drop significantly next year due to the fact that prices of both Model X and Model S will decline and more Model 3 will be sold at a cheaper price at a constant gross margin.

4.) As mentioned above, I expect gross margin to remain constant over the next 3 years as production gets more efficient but prices need to decline to meet additional demand from normal people and not Tesla fangroups.

5.) I expect R&D to remain high due to the upcoming new models and therefore eating up a lot of operating profit.

6.) I expect Tesla to have 2-3 more capital raises in the next 4 years, as you can see in the model.

And in my opinion, these seems off...
1) agree there, improving production, GF3, new vehicles -> growth.

2) It can be greater than 400k due to GF3. No reason for growth to slow, although at that point, Tesla will still be defining the EV market growth rate volume and profit wise, so it's a tautology.

3) S/X price reductions are not a fact. Further, their GM should continue improving, along with 3's.

4) To "meet demand" implies 'normal' people will buy at above typical price. Did you mean "increase demand"?

5) Your model has 2024 at 5x of 2018 for R&D (8 billion), but you show no return from that spend. Seems wildly high and ineffectual.

6) Only because you blew all the profit on R&D and SG&A. 19 billion combined in 2024. SG&A increases 50% YoY and then 33% YoY in 2021 and 2022, why?

 

[Priigoat]

And in my opinion, these seems off...
1) agree there, improving production, GF3, new vehicles -> growth.

2) It can be greater than 400k due to GF3. No reason for growth to slow, although at that point, Tesla will still be defining the EV market growth rate volume and profit wise, so it's a tautology.

3) S/X price reductions are not a fact. Further, their GM should continue improving, along with 3's.

4) To "meet demand" implies 'normal' people will buy at above typical price. Did you mean "increase demand"?

5) Your model has 2024 at 5x of 2018 for R&D (8 billion), but you show no return from that spend. Seems wildly high and ineffectual.

6) Only because you blew all the profit on R&D and SG&A. 19 billion combined in 2024. SG&A increases 50% YoY and then 33% YoY in 2021 and 2022, why?

1) Agreed
2) I believe that it can be greater than 400'000. However, not until after 2020.
3) Of course S/X prices will gradually decrease over the next 2 years as competition cars are coming into the market. This will put pressure on the margin's. Logical effect, even if the sold units of the competition will be significantly lower than Teslas GM will not improve as Elon also told us in the Q3 earnings call. This is simply not possible as the efficiency gains are simply offset by lower prices to meet demand (see no. 4)
4) To "meet demand" can also implify that they need to decrease prices to "meet the demand" that sits at a lower sell price.
5) I agree with you. The cost basis is very difficult to estimate and this might be the biggest factor deciding how profitable Tesla will be in the future. There is no specific reasoning for my assumption - I did not do enough research.
6) same for 6 - I'd appreciate further input on R&D and SG&A, as it is difficult to esimate. We'd need to split up the costs and go in detail in the various cost blocks to get more detailed figures for that one.

 

[AndyH]

3.) I expect revenue per car to drop significantly next year due to the fact that prices of both Model X and Model S will decline and more Model 3 will be sold at a cheaper price at a constant gross margin.

4.) As mentioned above, I expect gross margin to remain constant over the next 3 years as production gets more efficient but prices need to decline to meet additional demand from normal people and not Tesla fangroups.

6.) I expect Tesla to have 2-3 more capital raises in the next 4 years, as you can see in the model.

Thanks for the numbers. I'm with you on 1 future capital raise. 2-3 sound excessive. And why would S n X prices decline next year? They might increase. Those that could only afford lowest trim S n X might chose a fully loaded 3 instead leading to higher margin for Tesla. Lower trim 3 will only be produced in restricted numbers until efficiency allows good margin. Tesla have acted responsibly up until now and will most likely continue to do so. Demand in Europe isn't tapped yet.

The ****ing tariffs are a monkey wrench.

 

[avoigt]

I just played a little bit with the financial model of Tesla. In my opinion, the following data could be quite accurate regarding revenue growth and operating profit based on the following underlying 'realistic' and not 'optimistic' assumptions:

1.) Short-term until 2020/2021, I expect highter than average-industry revenue growth rates in terms of units sold. This is due to the fact that Tesla is still ramping up production and demand is not yet satisfied.

2.) In 2020, I expect Model 3 demand to first see a first set-back and the growth rate will slowly adjust itsself to the normal electric vehicle industry rate. Furthermore, we are unsure about how Tesla will be able to producre more than 400k Model 3 per year.

3.) I expect revenue per car to drop significantly next year due to the fact that prices of both Model X and Model S will decline and more Model 3 will be sold at a cheaper price at a constant gross margin.

4.) As mentioned above, I expect gross margin to remain constant over the next 3 years as production gets more efficient but prices need to decline to meet additional demand from normal people and not Tesla fangroups.

5.) I expect R&D to remain high due to the upcoming new models and therefore eating up a lot of operating profit.

6.) I expect Tesla to have 2-3 more capital raises in the next 4 years, as you can see in the model.

Conclusion: From a revenue perspective, I can totally see Tesla hitting 750-1000$ per share as demand for electric vehlices will gradually raise over the next 15 years. However, I do also expect due to the following 2 reasons, that gross profit will decline and not a lot of operating profit will be left for shareholders (letting the short theory to be at least partly alive):

- Competition will enter the market putting pressure on gross margins long-term. Normal automotive gross margins are around 13%. As Tesla is a luxury brand, one might argue about a gross margin in the 15-20% range. I do not think that over 20% is long-term sustainable as more competition enters the market.

- Furthermore, Tesla will need to invest a lot of money in Research in Development and I expect to see a lot of value from these expenses but also nut a lot of profitability from a shareholder perspective.

No offense but I disagree with actually almost everything you wrote.

You underestimate in my opinion what is happening with Tesla demand and supply. as well as what they do with new markets, new products, efficiency and productivity gains and R&D. Your statements contradicts with many facts and information that are available today.

I suggest read a lot maybe even a few hundred posts and make some research.

 

[avoigt]

My efforts to improve awareness include showing off midrange acceleration on uphill on ramps. Clearing for trucks and such. If they still used CB radios, every trucker would be a tesla fan - never cause anyone to use their brakes. Very considerate and noticeable display of power.

Regardless how hard I try I do not find any correlation between what I wrote and what you did respond..... maybe you quoted a wrong post?

 

[avoigt]

Tesla Solar Roof Facility Now Has Shifts 24/7 to Meet Staggering Demand | Inverse

 

[Priigoat]

No offense but I disagree with actually everything you wrote.

You underestimate in my opinion what is happening with Tesla demand and supply. as well as what they do with new markets, new products, efficiency and productivity gains and R&D. Your statements contradicts with many facts and information that are available today.

I suggest read a lot maybe even a few hundred posts and make some research.

I wanted to do a very "realistic" model taking into consideration competitors and gross margins decrease. But even then, I'd estimate to see at least at 50-100% increase in Tesla share price. As a shareholder standpoint, I just try to be as realistic as possible to estimate risk/reward in the future.

 

[KarenRei]

Actually, its an idiot who has not found his village.

I think he's found his village just fine.

https://seekingalpha.com/symbol/TSLA?s=tsla

 

[JRP3]

Paris riots over increased fuel taxes Police fire tear gas and water cannons to disperse protesters in Paris

 

[kbM3]

Yet, I absolutely want to be on the train with my tickets in hand at that moment. The only way I can do that is not to allow someone to winkle my shares out of my hands.

TL;DR - Watch for the shell game (AKA a "short-con" aptly enough).

[edit for clarity]

I am fighting this psychological tendency to over value shares I already own. If one has decided to go 100% TSLA with no margin, then this view has merit. However consider other cases.

Let’s imagine someone has decided they want to be at 50% TSLA in their IRA(to simplify and ignore tax consequences). If being 50% TSLA is wise at $325/share, then it would have been wise to be > 50% TSLA when the stock was discounted for no fundamental reason to $250/share recently. Conversely if the stock were to suddenly double and the rest of the IRA portfolio were to stay the same, the investor now needs to question whether they want to have 75% of their IRA in TSLA.

I think people should constantly revisit their percentage of TSLA, based on their judgment of the value vs. the risk of being too invested in a single stock. It is a very complex decision.

In summary, if one ignores tax consequences, then there is nothing special about shares one already owns. That should not even be a factor in the decision.

 

[Tifighter]

I talked yesterday with a sales manger in the Munich Tesla store and he told me they did not have time to breath the whole week trough given the constant and never ending cloud of people around the 3 from when the opened the store in the morning up to the evening where they have to lock the store to avoid it never gets empty.

The car is now about 10 days in the store and was occupied every second I was around.

I did not pick up a single negative tone, glance or comment from any visitor instead only positives so as expected the car continues to impress just standing and I can just imagine how it will be once they drive it.

I stopped by the store in Zurich and heard the same story. I’m confident that no one will be disappointed by their test drive.

 

[MD70]

The Bloomberg article claims Tesla has 11,000 orders for the solar roof, This is the first time I have heard any indication of the demand for the roof, if true this is amazing. I hope they can ramp up the production to meet this demand.

 

[HG Wells]

The Bloomberg article claims Tesla has 11,000 orders for the solar roof, This is the first time I have heard any indication of the demand for the roof, if true this is amazing. I hope they can ramp up the production to meet this demand.

Headline: Shortsville Times

NO CUSTOMERS only 11,000 people want Musk's solar roof.

 

[Drax7]

Tesla is aiming for 7000 model 3s production per week by Nov 28, if they succeed
It will be leaked or announced , that should be a bullish accomplishment in the coming
Week .